Current Property Must-know


The Singapore government has introduced a series of measures popularly known as “Property cooling measures” since 14 September 2009. The main reason for these series of measures is to ensure that Singapore’s property market remains stable and sustainable.

 

In the beginning, most of these property cooling measures targeted Singapore’s residential segment but since 2013, some of the measures introduced also affected both the industrial and commercial segments. The last measure was announced on 9 December 2013.

 

This is a summary of the major cooling measures currently in place that are affecting Singapore’s residential segment. Please check with the various government agencies for the full list of measures. Links provided at the end of this page.

 

1) Total Debt Servicing Ratio – TDSR

 With effect from 29 June 2013

See MAS website

 

The Total Debt Servicing Ratio framework is a rule enforced by the Monetary Authority of Singapore (MAS). Under this rule, any property loan extended by financial institutions must not exceed a TDSR threshold of 60%. This basically means that the percentage of total monthly debt obligations of the borrower to gross monthly income must not exceed 60%.

 

2) Additional Buyer Stamp Duty – ABSD

 Last revised & effective from 12 January 2013
See IRAS website

 

The ABSD is a tax payable by buyers of residential properties on top of the normal 3% buyer stamp duty that all buyers have to pay. The taxable amount is dependent on the buyer’s citizenship and the number of residential properties that the buyer currently owns. The table below shows the ABSD payable by different categories of buyers.

  • Singapore Citizens

    • 1st property – 0%
    • 2nd property – 7%
    • 3rd property or beyond – 10%

  • Singapore PRs

    • 1st property – 5%
    • 2nd property – 10%
    • 3rd property or beyond – 10%

  • Foreigners & non individuals

    • 1st property – 15%
    • 2nd property – 15%
    • 3rd property or beyond – 15%

 Citizens of the USA, Switzerland, Liechtenstein, Norway and Iceland will be treated the same as Singapore Citizens due to FTA agreement.

 

 Under certain scenarios, ABSD can be remitted or refunded to buyers. See IRAS website for more information.

3) Seller Stamp Duty – SSD

 Last revised 11 March 2017, effective from 14 January 2011
See IRAS website

 

The seller stamp duty is a tax on the selling price of the residential property. This is applicable for Singapore residential properties bought on or after 14 January 2011.

 

a) Residential property bought between 14 January 2011 to 10 March 2017
The table below shows the SSD payable for the various scenarios if the residential property was bought during this period.

 No SSD is payable if the residential property is sold after 4 years.

  • Scenario 1

  • Holding Period

    Up to 1 year

    • 16%

  • Scenario 2

  • Holding Period

    More than 1 year and up to 2 years

    • 12%

  • Scenario 3

  • Holding Period

    More than 2 years and up to 3 years

    • 8%

  • Scenario 4

  • Holding Period

    More than 3 years and up to 4 years

    • 4%

a) Residential property bought on or after 11 March 2017
The table below shows the SSD payable for the various scenarios if the residential property was bought during this period.

 No SSD is payable if the residential property is sold after 3 years.

  • Scenario 1

  • Holding Period

    Up to 1 year

    • 12%

  • Scenario 2

  • Holding Period

    More than 1 year and up to 2 years

    • 8%

  • Scenario 3

  • Holding Period

    More than 2 years and up to 3 years

    • 4%

 Under certain scenarios, SSD exemptions or remissions are possible. See IRAS website for more information.

4) Loan to value (LTV), loan tenure & cash downpayment

 Last revised & effective from 12 January 2013
See MAS website

 

Besides taking into consideration the buyer’s income, the amount of residential property loan a buyer is eligible for is also dependent on the loan tenure and the number of outstanding property loan this buyer has. The table below shows the maximum LTV a buyer is eligible for and the cash downpayment this buyer has to come up with based on different scenarios.

  • Scenario 1

  • Loan tenure

    Up to 30 years

     

    Age

    Not more than 65 years old at end of tenure

    • 1st loan – 80% LTV / 5% cash
    • 2nd loan – 50% LTV / 25% cash
    • 3rd loan or beyond – 40% LTV / 25% cash

  • Scenario 2

  • Loan tenure

    Up to 30 years

     

    Age

    Age exceeds 65 years old at end of tenure

    • 1st loan – 60% LTV / 10% cash
    • 2nd loan – 30% LTV / 25% cash
    • 3rd loan or beyond – 20% LTV / 25% cash

  • Scenario 3

  • Loan tenure

    31 to 35 years

     

    Age

    Not applicable

    • 1st loan – 60% LTV / 10% cash
    • 2nd loan – 30% LTV / 25% cash
    • 3rd loan or beyond – 20% LTV / 25% cash

 Non individuals are only eligible for 20% LTV to purchase residential properties.

5) Major measures applicable to HDB

 Last revised & effective from 27 August 2013
See HDB website

 

      • The Mortgage Servicing Ratio limit is now set as 30%.
      • Maximum loan tenure of 25 years for loans by HDB.
      • Maximum loan tenure of 30 years for loans by financial institutions.
      • HDB flats belonging to Singapore Permanent Residents cannot be rented out.
      • Singapore Permanent Residents need to wait for 3 years from the date of obtaining SPR status before they can buy a resale HDB flat.
      • Singapore Permanent Residents who own a HDB flat must sell their HDB flat within 6 months of getting keys to their next property.